WASHINGTON — President Donald Trump’s campaign is violating federal election law by funneling close to a quarter-billion dollars to date through private companies in order to hide the ultimate recipients of the money, including the wife of one of his sons and the girlfriend of another, a watchdog group charged in a complaint filed Tuesday.
“The money is being laundered through corporations run by top Trump campaign officials,” said Brendan Fischer, a lawyer with the Campaign Legal Center. “That has the effect of keeping the public in the dark as to a big chunk of Trump campaign spending.”
The group’s complaint with the Federal Election Commission asks for an investigation to put an end to the practice and to punish the campaign with fines.
How quickly any of that might happen, though, is an open question, given that the commission currently does not have a quorum to take official actions. Even with one in place, investigations can last for several years.
According to the complaint, both Trump’s reelection campaign and a related fundraising group, the “Trump Make America Great Again Committee,” are breaking federal campaign law by running payments through former Trump campaign manager Brad Parscale’s private firm as well as American Made Media Consultants, a company created specifically to place ads and buy related services for the campaign.
Parscale’s companies have already received $39 million from Trump’s campaign, the Republican National Committee and their joint fundraising committees, according to a HuffPost analysis of FEC filings from Jan. 20, 2017, through the end of June 2020. American Made Media Consultants has been paid $177.6 million from those same committees through that time period.
In April, Parscale acknowledged paying them through his firm, Parscale Strategy. “I can pay them however I want to pay them,” he told HuffPost.
Other secretly paid vendors appear to include those belonging to a Parscale associate, Gary Coby, that send out the ubiquitous mass fundraising text messages to many hundreds of thousands of Trump supporters multiple times per day.
One of the basic concepts behind federal campaign finance law is that Americans have a right to know how candidates, parties and political action committees raise money and spend it.
“This scheme violated the law and undermines the public’s right to know. What precisely is being hidden is unknown. We don’t know for sure,” Fischer said.
Trump campaign communications director Tim Murtaugh denied that the payments broke any laws.
“AMMC is a campaign vendor responsible for arranging and executing media buys and related services at fair market value,” Murtaugh said. “AMMC does not earn any commissions or fees. It builds efficiencies and saves the campaign money by providing these in-house services that otherwise would be done by outside vendors. The campaign reports all payments to AMMC as required by the FEC.”
The Republican National Committee, which also benefits from the work of Guilfoyle and Lara Trump, said in a statement from communications director Michael Ahrens: “The RNC and its joint fundraising committees comply with all FEC regulations and campaign finance laws.”
The Campaign Legal Center’s complaint says that previous rulings from the FEC make clear that paying vendors to perform services without itemizing sub-contractors and employees is only permissible when those payments are made in “arms-length” transactions. But when campaign officials are involved with a vendor’s business — such as Parscale’s clear involvement with his own private firm — then the vendor’s payments to contractors and employees must be itemized, the complaint said.
Under the Trump campaign’s theory that it can pay a lump sum to a private company like Parscale’s, there is nothing stopping it from funneling all of its spending that way each month, with the public getting zero details on how any of it is being spent, Fischer said.
He acknowledged that previous campaigns have used similar entities in the past — the presidential campaign of Republican Mitt Romney in 2012 created a firm, American Rambler, to buy all of its television advertising — but nothing on this scale.
“The Trump campaign has taken it to another level,” Fischer said.
Parscale was recently demoted from campaign manager to the head of digital strategy, the same job he had in Trump’s 2016 campaign, during which his firms were paid $93.9 million. Trump, according to informal advisers close to the White House, was unhappy with how much money Parscale had made for himself, even as the campaign and the RNC together spent close to a billion dollars and Trump himself slid in the polls.
Thanks to his newfound wealth, Parscale, who just a few years ago was designing websites in San Antonio for Trump’s properties, has been able to buy a $2.4 million waterfront house in Fort Lauderdale, Florida, a pair of million-dollar condos, a brand new $400,000 boat, and another half-million dollars in luxury cars, including a Range Rover and a Ferrari.